Despite the challenges posed by unstable financial markets, the University concluded the fiscal year ending 31 August 2024 in an excellent financial position. This strength will allow us to further our strategic priorities in the upcoming years. Consolidated net assets at the close of the year totalled HK$5,904.7 million, an increase of HK$797.1 million, or 15.6%, from the previous year. Factors contributing to this robust performance included ongoing growth in tuition income from both undergraduate and taught postgraduate programmes, alongside strong investment returns due to prudent financial management. The consolidated net surplus of HK$797.1 million lays solid groundwork for future mission-driven investments in 2024–25 and beyond.
Consolidated income for the year has exceeded HK$2 billion for the first time in the University's history, increasing by HK$412.7 million, or 24.2%, to HK$2,118.0 million (2022–23: HK$1,705.3 million). Tuition income, our largest revenue source, grew by HK$427.5 million, or 26.3%, to HK$2,053.7 million (2022–23: HK$1,626.2 million), driven by higher student enrolment and tuition fees. This is in line with the University's overall strategy of maintaining student numbers whilst driving continued institutional quality through higher entry requirements.
Total consolidated operating expenses amounted to HK$1,575.3 million, an increase of HK$232.8 million, or 17.3%, (2022–23: HK$1,342.5 million), mainly due to higher salary costs to attract and retain talent, and investments in infrastructure and student services to support the growth and development of the University.
Total staffing costs, which accounted for 63.7% of total operating expenses, increased by HK$154.5 million, or 18.2%, to HK$1,003.4 million (2022–23: HK$848.9 million) as a result of an increase in the headcount of academic and administrative staff, and salary adjustments, in line with prevailing market trends.
Non-staffing expenses also increased by HK$78.3 million, or 15.9%, to HK$571.9 million (2022–23: HK$493.6 million), as the University spent additional resources on a number of new initiatives to enhance campus infrastructure and to strengthen student and general educational services. Premises-related expenses were HK$228.1 million (2022–23: HK$206.4 million), which accounted for 14.5% of total operating expenses, reflecting mainly higher depreciation, as capital programmes advanced. Direct student costs and student activity expenses were HK$150.0 million (2022–23: HK$125.9 million), representing 9.5% of total operating expenses.
As at 31 August 2024, 47% (2022–23: 39%) of the University's investments were diversified portfolios of actively managed funds, and 53% (2022–23: 61%) were self-managed cash invested in the deposit pool, according to the guidelines on diversification, exposure and credit rating as agreed by the Finance Committee. The portfolio investment is designed to optimise long-term returns while mitigating risk through prudent financial management. We will continue to maintain significant cash and investment balances in preparation for future strategic investments.
Throughout the year, the University made ongoing efforts to upgrade its investment firm roster to enhance performance, foster relationships with top-performing partners, and take tactical measures to reduce exposure to the American market. These actions positively impacted our investment results, achieving gains beyond our forecasts. Consolidated interest and investment income totalled HK$431.6 million (2022–23: HK$192.3 million), benefiting from resilient U.S. economic growth, a gradual reduction in the rate of global inflation, the halt in rates hikes by central banks, and the continued excitement around advancements in artificial intelligence. As at 31 August 2024, the total consolidated cash and investment was valued at HK$5,614.3 million (2022–23: HK$5,254.1 million).
The remarkable generosity of the University's alumni and friends — including individuals, corporations and foundations — provides essential funding for student financial aid, investments in research, and every aspect of the University's operations. In aggregate, a total of HK$145.5 million in donations and grants was recorded for the year (2022–23: HK$124.9 million), with HK$40.2 million reflected as current year grants and donations in support of operations, and HK$105.3 million recorded as deferred income for funding the University's long-term investment in physical infrastructure and providing resources for core activities for future generations. We are deeply grateful to all donors for their contributions, which empower the University to achieve its mission and pursuit of excellence. The University will continue to strengthen its fundraising capabilities to secure a stable source of income for its long-term development.
The University maintained its upward momentum, closing the year with a consolidated operating surplus of HK$365.5 million (2022–23: HK$321.1 million) and net interest and investment income of HK$431.6 million (2022–23: HK$192.3 million). This led to an overall surplus of HK$797.1 million (2022–23: HK$513.4 million), one of the best results in its history. Strong operating and investment performance drove a significant net asset increase of HK$797.1 million, or 15.6%, ending the year at a record HK$5,904.7 million (2022–23: HK$5,107.6 million). Consolidated net operating cash flow was a robust HK$900.2 million (2022–23: HK$649.3 million), positioning us well to meet our investment commitments and grasp new investment opportunities.
The University provides its staff with two retirement schemes, namely the Occupational Retirement Schemes Ordinance (ORSO) Scheme and the Mandatory Provident Fund (MPF) Scheme. At year-end, the ORSO scheme had 227 members and the MPF scheme had 2,060 members. Their respective fund sizes were HK$197.8 million and HK$156.6 million.
Prudent financial management and flexible resource allocation over the past several years made it possible to advance our pursuit of academic excellence, expand our commitment to opportunity and access, and initiate new capital expenditure programmes for the development of the University.
While we can celebrate our financial achievements in 2023–24, we also recognise that external challenges, including economic growth slowdowns, political uncertainty driven by the U.S. Presidential election, war and other geopolitical tensions, could create volatility in financial markets which could impact our future investment returns. Nevertheless, with our sound strategy, leadership and governance, we are confident in our ability to achieve our goals, and remain committed to our mission. We look forward to a successful 2024–25.
